Lessons To Learn From Celebrity Bankruptcy Cases

Lessons To Learn From Celebrity Bankruptcy Cases

Even the most wealthy among us, the celebrities who bank millions with each movie release or speaking engagement, may have to suffer from bankruptcy at some point in their lives. The fact that even millionaires can lose it all shows us that nobody is immune to financial disaster. If you are facing insurmountable financial straits due to outsized medical bills, an upside-down mortgage or crushing credit card debt, you may want to seek a chapter 7 or chapter 13 bankruptcy.

Bankruptcy Lessons

Pay Attention to Maintenance - High-cost dining and utility bills to keep up an expensive lifestyle often push people into debt. MC Hammer and Stephen Baldwin both filed for bankruptcy due to their high-maintenance living habits. What may seem like an insignificant habit like a $20 dinner every day can be an extra $600 a month that you don't need to spend. Keep track of daily spending to help stave off bankruptcy.

Have a Backup Plan - Many celebrities who enjoyed "one-hit wonder" status simply sat back and banked on getting job offers soon after the income stopped flowing. This was the case for Sinbad, a comedian who gained wealth and fame in the early 90s, but who was forced in 2009 to file for Chapter 7 bankruptcy. Always try to find work, and keep a padded savings account for when times get rough!

Pay Your Taxes - Luminaries like Willie Nelson, Leona Helmsley and Wesley Snipes have all approached or filed for bankruptcy due to not paying taxes. Even though taxes don't seem like they have an impact on your day-to-day quality of life, if you don't pay them, you'll be facing huge problems.

Be Honest - Baseball All-star Lenny Dykstra attempted to hide $400,000 worth of assets during his Chapter 7 bankruptcy. The courts found out and Dykstra is now facing fraud, embezzlement and perjury charges which, if he is indicted on all counts, could lead to 80 years in jail.

The Final Point To Learn

Anyone can go bankrupt. This truth reflects a sobering but ultimately positive reality: our financial health is not entirely determined by how much we make but by our choices and our luck of the draw. For this reason, anyone facing potential bankruptcy should consult with a qualified bankruptcy attorney for information about whether they should go through the process. Bankruptcy is never easy, but it is open to nearly anyone with enough financial need - even the wealthy and famous. Don't delay finding a bankruptcy lawyer if you are in need.